On Tuesday, Scotiabank adjusted its financial outlook for American Hotel Income Properties REIT, traded on the Canadian exchange under the symbol HOT-U:CN and on the OTC market as AHOTF. The bank's analyst decreased the stock price target to C$0.75 from the previous C$0.90. Despite this change, the analyst maintained a Sector Perform rating for the real estate investment trust.
The revision in the stock price target is attributed to an anticipated increase in insurance costs that influenced the expected adjusted funds from operations per unit (AFFOPU) for the year 2025. This financial metric is a key performance indicator (KPI) for real estate investment trusts, helping gauge their operating performance.
The report also noted an update to the KPIs, with a slight improvement in the expected occupancy rates for the years 2024 and 2025. The forecast for 2024E occupancy has been raised by 50 basis points to 70.1%, and for 2025, the occupancy rate is projected to be 70.6%, up by 30 basis points.
Despite the first quarter typically being slow for the hotel industry, American Hotel Income Properties REIT has seen a promising start to the second quarter. Management highlighted a 10% year-over-year increase in Revenue per Available Room (RevPAR) for April, attributed to one-time events including the Easter holiday and a solar eclipse, which provided a temporary boost to business.
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